Bob Lefsetz on Mobile Music

Bob Lefsetz brings up some interesting points in a recent edition of the “Lefsetz Letter”

So, within hours of Verizon going unlimited, AT&T followed suit.

So where’s the revolution in music pricing?

If you consider it to be ten cents cheaper at Amazon, I can see why you’re working in the music industry and not telecom.

Close observers will notice Verizon’s effort was an attack on Sprint’s revival plan. Last Monday, Sprint’s new CEO said he was going to do this. Needing to put a stake in the withering Sprint, Verizon beat the company to the punch, the same way XM could have signed Howard Stern and killed Sirius. A shareholder suit against XM? At least Hugh Panero lost his job.

Even more interesting, Verizon is saying the money’s in data. That voice is a commodity. Kind of like the music business. But instead of broadening revenue streams before recorded music sales tanked, record companies kicked and screamed, blaming their customers for changing the business model.

Why isn’t mobile service $1000 a month! It’s a bigger miracle than listening to Kanye’s latest effort! Actually, it once was. Not a grand a minute, but a grand for a phone and a buck a minute. And almost no one had mobiles, only the elite, the rich. But then the wireless companies reduced the price to where seemingly every KID has a phone. And parents love this. Because they can check up on their progeny’s whereabouts INSTANTLY!

Yup, instead of bitching their kids are growing up too fast, parents now see the advantages of technology. Which those in the music industry still can’t see.

It is a 360 degree revenue pool. Now, more than ever. But who controls that pool? The label or the manager? Or is the manager the quarterback? Recorded music sales are not enough. But wouldn’t it be great if EVERYONE could own recorded music, wouldn’t there be greater riches!

Not according to the music publishers, and certainly not the labels, they’re Luddites. Want to blow up the music sphere? How about 100 tracks at the iTunes Store for $10? How about an UNLIMITED PLAN for $50 or $100 a month, with a two year contract (a la the mobile companies). How about some INNOVATION!

Sale at a buck a track is not the answer. Just listen to Irving Azoff (…97980.htm). There’s no real money there. People have got money in their wallets, and will spend it, if we give them a reasonable business proposition. A lot for a little, with extreme convenience. Believe me, P2P is not extreme convenience, especially for most computer users.

Stop bitching at people. Whether it be users or ISPs. Come up with a better offer. Grow the business instead of SHRINKING IT!

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Filed under music, music 2.0

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